Trading in many markets was thin, with investors uncertain whether the US Federal Reserve will signal a change in its easy monetary policy after a two-day meeting of policymakers that concludes on Wednesday.
Traders fear the dollar could test its all-time low against a basket of currencies this week if the Fed keeps monetary policy loose. The greenback turned higher after commodity prices, led by silver, fell.
Oil turned lower when silver curtailed a sharp rally and when there was no follow-through after oil prices hit their highest since September 2008.
“Silver’s sell-off spilled over to crude markets and traders took profits,” said Dan Flynn, analyst at PFGBest Research in Chicago.
Spot silver prices dropped nearly 2 percent, affected by technical factors, after a failure to take out a record price set in 1980 triggered a bout of heavy selling.
Spot silver fell 0.8 percent to $46.29 an ounce, off a session high of $49.31.US silver futures had jumped more than eight percent to a intraday high of $49.82 an ounce, short of the all-time peak of $50.35 set Jan. 18, 1980.
Spot gold rose 0.3 percent to $1,511.40 per ounce it hit a record high of $1,518.10 an ounce.
US stocks were flat to lower, just below three-year highs, which had been reached after strong first-quarter earnings.
Stocks were lower on signs some corporate outlooks were being strained by concerns over higher raw material costs, including consumer products maker Kimberly-Clark Corp.
The Dow Jones industrial average was down 36.03 points, or 0.29 percent, at 12,469.96. The Standard & Poor’s 500 Index was down 3.01 points, or 0.23 percent, at 1,334.37. The Nasdaq Composite Index was up 0.08 points at 2,820.24.
Although oil prices turned lower in choppy trade, crude’s recent powerful surge has offset positive momentum from earnings, said Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland.
US crude futures were down 41 cents at $111.88 per barrel.
A more tempered view of economic growth was taking hold across many markets, with higher US gasoline prices seen as a damper for consumer spending.
“(There’s a) fundamental bias that the data is indeed slowing and higher gas prices will take their toll on the consumer,” said David Ader, senior government bond strategist at CRT Capital Group in Stamford, Connecticut.
US government debt prices rose as traders banked on the idea that even as the Federal Reserve’s second bond-buying program nears an end, the Fed will hold on to its portfolio and its current level of monetary accommodation for some time.
The benchmark 10-year US Treasury note was up 8/32 in price to yield 3.37 percent.
The dollar was up against a basket of major currencies, with the US Dollar Index up 0.06 percent at 74.041, while against the Japanese yen, the dollar was up 0.10 percent at 81.91.
